CALA Insurance Policy and Regulations 3

Question 1

Under most state regulations, what is the maximum number of days an insurer has to acknowledge receipt of a first-party auto claim after notification?

Accepted Answer

10 days

Answer

Most state unfair claims settlement regulations require insurers to acknowledge receipt of a claim within 10 working days of notification.

Question 2

A policy contains a 'severability of interests' clause. How does this affect coverage when two insureds under the same policy have conflicting interests in a claim?

Accepted Answer

Each insured is treated separately, so one insured's misconduct does not affect the other's coverage

Answer

A severability of interests (separation of insureds) clause treats each insured independently, preventing one party's wrongful act from eliminating coverage for an innocent co-insured.

Question 3

Which coverage part of the PAP responds when the insured is legally entitled to recover damages from the owner or operator of an underinsured motor vehicle?

Accepted Answer

Uninsured/Underinsured Motorist (UM/UIM)

Answer

Underinsured Motorist (UIM) coverage responds when the at-fault driver's liability limits are insufficient to cover the insured's damages.

Question 4

What does a 'policy period' clause define in an automobile insurance contract?

Accepted Answer

The time frame during which covered losses must occur for the policy to respond

Answer

The policy period clause establishes the start and end dates of coverage, and generally only losses occurring within that window are covered.

Question 5

In a no-fault auto insurance state, which type of coverage pays for the policyholder's own medical expenses and lost wages regardless of who caused the accident?

Accepted Answer

Personal Injury Protection (PIP)

Answer

Personal Injury Protection (PIP) is the primary coverage in no-fault states, paying the policyholder's medical costs and lost wages without regard to fault.

(CALA) Certified Automotive Loss Adjuster Practice Test

(CALA) Certified Automotive Loss Adjuster Practice Test

CALA Insurance Policy and Regulations 3